NLG.L Regulatory News (NLG)

13 Oct 2005 15:42

Nelson Resources Limited13 October 2005 13 October 2005 Nelson Resources Limited NELSON RESOURCES AND LUKOIL ENTER INTO A DEFINITIVE AGREEMENT TO AMALGAMATE IN A US$2 BILLION OFFER FOR ALL OF THE SHARES OF NELSON; LUKOIL TO ACQUIRE SHARES OF NELSON'S PRINCIPAL SHAREHOLDERS Toronto, Ontario, October 13, 2005 - Nelson Resources Limited ("Nelson") ofBermuda (TSX/AIM: NLG) announced today that it has entered into a definitiveagreement with LUKOIL Overseas Holding Ltd. ("Lukoil") dated October 13, 2005 toeffect an amalgamation between Nelson and a wholly-owned subsidiary of Lukoil.On the effective date of this amalgamation, all issued and outstanding commonshares of Nelson on a fully diluted basis will be exchanged for US$2 billion incash, resulting in a payment to shareholders of approximately US$2.1916 perfully diluted share. The transaction is subject to the approval of 75% of the votes cast by Nelson'sshareholders at a special meeting of shareholders expected to be held in lateNovember, 2005. Closing is subject to certain other conditions, including theexercise, cancellation or termination of all outstanding options to acquireshares of Nelson, the receipt of all requisite regulatory approvals and consentsnecessary to consummate the amalgamation, and the resignation of each directorand officer of Nelson effective as of the effective date of the amalgamation. The amalgamation agreement contains customary provisions prohibiting Nelson fromsoliciting any other acquisition proposal but allows the Board of Directors ofNelson to accept and recommend a superior proposal if it is required to do so toavoid breaching its fiduciary duties and upon payment of a termination fee ofUS$60 million. Under the agreement, Lukoil has the right to match any suchsuperior proposal. Based on publicly disclosed information, Nelson understands that Lukoil hasentered into support agreements dated September 30, 2005 with Nelson's principalshareholders - Central Asian Industrial Holdings N.V., Energy InvestmentsInternational Ltd., Cott Holdings Group Ltd., and Center Finance Ltd. Nelson isadvised that collectively, these shareholders own an aggregate of 584,643,162common shares of Nelson (approximately 66.3% of the issued and outstandingcommon shares of Nelson) and they have agreed to vote their shares in favour ofthe amalgamation. Nelson has not been provided with copies of the agreementsbetween Lukoil and these shareholders. Lukoil indicated that it proposes to acquire the 66.3% of Nelson's shares fromthese principal shareholders as soon as possible. The amalgamation agreement has been recommended by the Special Committee of theBoard of Directors of Nelson and has been approved by the Boards of Directors ofboth Nelson and Lukoil's subsidiary. BMO Nesbitt Burns is acting as financial advisor to the Special Committee andhas verbally delivered their fairness opinion to the Special Committee, whichfound that as of October 11, 2005, the consideration to be received by minorityshareholders of Nelson pursuant to the subject offer is fair, from a financialpoint of view. Subject to receipt of shareholder approval of the transaction and satisfactionof the conditions precedent to the amalgamation agreement, the proposedtransaction is expected to close in early December, 2005. A telephone conference call to review the transaction is scheduled to take placeon Monday, October 17, 2005, at 2:00pm BST (1:00pm GMT, 9:00am EDT). There willbe a short presentation followed by a question and answer session. To participate in the conference call, please dial: • From the UK: 0845 144 0016 • From North America: 1-866-224-2914 • From abroad: +44 1452 569 103 If you are unable to join the call, a replay will be available from Nelson'swebsite, www.nelsonresources.com, once the call has ended. Nelson Resources Limited is an oil exploration and production company withoperations in the Republic of Kazakhstan. The Company established its presencein the Kazakhstan oil sector in 2000 and its management team, comprising of bothinternational and Kazakh executives, has extensive experience of the Kazakhoperating and regulatory environment. For further information, please contact: Nelson Resources LimitedNicholas Greene, Chief Financial Officer Tel: +44 20 7495 8908ngreene@nelsonresources.co.uk Fred Hodder Tel: +44 20 7495 8908fhodder@nelsonresources.co.uk Investor Relations Bell Pottinger Corporate & Financial (London)Nick Lambert Tel: +44 (0) 20 7861-3232 Cavalcanti Hume Funfer Inc. (CHF Inc., Toronto)Olav Svela, Vice President Tel: +1 416-868-1079olav@chfir.com If you prefer to receive press releases by e-mail, please contact HeatherColpitts (heather@chfir.com) and specify "Nelson press releases" in the subjectline. THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES ORFOR DISSEMINATION IN THE UNITED STATES. This news release does not constitute anoffer to sell or a solicitation of an offer to buy any of the securities of theCompany in the United States. The securities of the Company have not been andwill not be registered under the United States Securities Act of 1933, asamended (the "U.S. Securities Act") or any state securities laws and may not beoffered or sold within the United States or to U.S. persons unless registeredunder the U.S. Securities Act and applicable state securities laws or anexemption from such registration is available. The TSX neither approves nor disapproves of the information contained herein. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange